The Problem

Although marketed as a quick financial fix, the long-term debt is the typical borrower experience and the core of the business model. With each loan flip or new loan, borrowers are unable to both repay the lender and have enough money left until the next payday arrives. Payday loans are a debt trap by design and lead to cascade of other financial consequences such as increased overdraft fees and even bankruptcy. A recent trend is for payday lenders to make multi-payment “payday installment” loans, which can be for larger amounts and extend the cycle of high-cost debt even longer.

CRL's work grows directly from our affiliation with Self-Help Credit Union, our founder and one of the nation's largest nonprofit community development lenders. For over 30 years, Self-Help has worked to create ownership and economic opportunity in underserved communities through responsible loans and financial services.